Total Nonresidential Construction Spending
determined that, in order to stay in compliance with the ACA’s metallic tier guidelines, they must change plan benefits every year. Using the Platinum Plan as an example, if the actuarial value of a plan this year was $1,000, then the Platinum Plan has to cover 90 percent ($900) and pass 10 percent ($100) to the plan member. In the second year, if the actuarial value goes up to $1,100, 10 percent ($110) can be passed to the plan member. This will always be a moving target until the values are fixed or the law is changed. For insurance carriers to be competitive in 2020, they will continue to see plans that offer Skinny Network choices, which offer a smaller number of providers. Skinny Network plans might offer an attractive price, but employees will have a limited choice of doctors. Be sure to run a report to compare current providers to those associated with any programs you are considering. Insurance carriers continue to seek greater discounts from hospitals, medical groups and doctors and are offering patient exclusivity in return. Some insurance carriers will al- low Skinny Networks to be offered side-by-side with full networks, with the price and contribution being set by the employer to favor one or the other. Employee satisfaction increases with choice of medical plans and net- works, so the more choices offered, the better the employees feel about their benefits package. Also, ancillary (Dental, Life, Disability and Vision) and supplemental (Accident, Cancer, Hospital, etc.) benefits have shown to greatly improve employee satisfaction, which will help your organization hire and retain the best employees.
Captives, self-funding and partially self-funded plans continue to be popular and could be a viable option for companies with over 50 employees. Additional ways to reduce costs include buying a Bronze Level Plan and supplementing it with Cancer, Hospital, Accident and Critical Illness plans. Conclusion While it is important that you have a basic understanding of the eco- nomics of the insurance industry and how this can affect your business, there is nothing you can do about it. The market is the market. What you can control is how your company manages risk. Risk management is “market agnostic.” It needs to be front and center all the time. In the long run, the only way to reduce the cost of risk is to reduce the frequency and severity of claims that drive the cost. An effective risk management program coupled with a proactive risk management- oriented insurance brokerage and the right insurance company is the key to lowering your total cost of risk. Investment in risk management will produce great returns and directly impact your bottom line. JEFF CAVIGNAC, CPCU, RPLU, ARM, JAMES P. SCHABARUM II, CPCU, AFSB, AND PATRICK CASINELLI, RHU, REBC, CHRS, are Principals and Jase Hamilton, CPCU, AFSB, is a Surety Account Executive for Cavignac & Associates, a leading risk manage- ment and commercial insurance brokerage firm providing a broad range of insurance and expertise to design and construction firms, as well as to law firms, real estate-related entities, manufacturing companies and the general business community. The firm employs a staff of 55-plus people at offices located at 450 B Street, Suite 1800, San Diego, Calif., 92101. More informa- tion about the company can be found on the Web at www.cavignac.com.
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